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DirecTV Ad Sales Go Direct

Jan 12, 2004  •  Post A Comment

In one of its first moves since acquiring control of DirecTV, Rupert Murdoch’s News Corp. is establishing an in-house ad sales staff to sell commercials on the satellite broadcast service.
Cable veteran Bob Riordan will join DirecTV as senior VP, ad sales, effective Jan. 16. Mr. Riordan spent the bulk of his 25-year career in cable in sales at USA Network. Most recently he was executive VP at MPG USA, an ad buying and planning unit of Havas.
“The people at News Corp. have decided that they want to start their own internal sales organization,” Mr. Riordan told TelevisionWeek. One ad sales source estimated that DirecTV generates $80 million to $100 million in ad revenue annually, mostly from direct response ads.
He said he expects to be working with the syndication ad sales executives at News Corp.’s Twentieth Television unit and will report to Bob Cesa, executive VP, barter, ad and cable, at Twentieth, instead of reporting directly to a senior DirecTV executive. A spokesperson for Twentieth Television had no comment.
DirecTV takes the ad slots provided to cable operators for local ad time and sells them on a national basis. That means about two minutes per hour on most networks, plus some availabilities on some sports properties. “It’s a lot of inventory,” Mr. Riordan said.
Before News Corp. acquired the satellite broadcaster that ad time was sold for DirecTV by Sony Pictures Television. A Sony Pictures Television spokesperson had no comment.
DirecTV now has about 12 million subscribers, and Mr. Riordan said News Corp. plans to get that number up to 20 million in the next four to eight years. But even at that level, DirecTV may not have enough distribution to interest national advertisers. Most national advertisers won’t look seriously at national cable networks until they have at least 50 million subscribers.
Mr. Riordan said he didn’t know how much in ad sales DirecTV currently generates. But he said DirecTV subscribers make an attractive audience for advertisers.
“This is highly targeted `A’ county, with exceptional income breaks, far better than anything on network television,” he said.
Harry Keeshan, executive VP, national broadcast, at media buying firm PHD USA, has bought ads on DirecTV for his clients because “of those 12 million homes, a large percentage of them are very upscale and its a growing universe.”
He said Sony did a “terrific” job selling DirecTV. Advertisers could buy spots on a group of channels, the news networks or the entertainment networks or the sports networks. Will News Corp. be able to wring more money out of DirecTV? “Sony was plenty aggressive. I don’t see any reason to think Fox would be more aggressive,” Mr. Keeshan said.
In its financial reports, DirecTV does not break out how much it earns from ad sales. Analyst Richard Greenfield at Fulcrum Global Partners said he wasn’t sure how big DirecTV’s ad revenue was, but he wasn’t surprised that Mr. Murdoch’s team would move quickly to maximize that business.
“News Corp. has tremendous resources in selling ads,” and having DirecTV under its umbrella would create opportunities to jointly sell with many of its other units, he said.
Mr. Riordan said he took the job because he was impressed by the investments News Corp. was making in DirecTV and “their belief in the future of the product.” He also wanted the chance to be a part of a new division within News Corp. “Those were the driving forces that made me want to go to work for such an organization.” he said.